Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Exercise 34

Wilson Company acquired 40 percent of Andrews Company at a bargain price because of losses expected to result from Andrews's failure in marketing several new products.Wilson paid only $100,000, although Andrews's corresponding book value was much higher.In the first year after acquisition, Andrews lost $300,000.In applying the equity method, how should Wilson account for this loss